The Dow Jones Industrial Average slid 19.12 points, to end at 15,335.28 after briefly touching a new all-time high of 15,391.84. Merck led the blue-chip laggards, while Alcoa gained.

The S&P 500 dipped 1.18 points, to close at 1,666.29. And the Nasdaq erased 2.53 points, to finish at 3,496.43, after briefly crossing above 3,500. The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, closed near 13.

Meanwhile, the Russell 2000 index broke above the 1,000 level for first time ever and nearly four months after crossing 900.

Last week, both the Dow and S&P 500 hit fresh highs and all three major averages logged their fourth-straight weekly gains. The S&P 500 closed at 1,667 points, and is up nearly 150 percent since the financial crisis when it reached a low of 666.79 in March 2009.

Where are the opportunities in the market? BlackRock's president Rob Kapito discusses where investors are putting the most money in the ETF market, and the Fed's role in the market.

With no major economic reports on tap, investors have been focusing on if or when the Fed should start paring back on its bond-buying program. The talk grew louder last week, further fueled by the comments of Fed hawks John Williams and Charles Plosser. Investors will be closely watching Fed Chairman Ben Bernane's testimony before the Senate on Wednesday, which may illuminate the central bank's plans regarding reducing or ending bond purchases.

Chicago Fed President Charles Evans expressed optimism over the U.S. economy. And said that he expects to see "self-sustaining growth" at "escape velocity" in 2014.

"We would like to see inflation closer to our objective," he added.

Traders, meanwhile, said Evans' comments on the improving economy added to views that he would support tapering QE bond purchases. Evans is a voting member of the FOMC (Federal Open Market Committee).

Earlier, Dallas Fed President Richard Fisher, who has long opposed the bond-buying program and wants to reduce it, told CNBC that while the Fed's accommodative policies have boosted stocks, it is unclear whether they are doing enough for the broader U.S. economy. Fisher added he expects real U.S. GDP growth of more than 2.5 percent by year end.

The S&P 500 index has soared approximately 16 percent since the quantitative easing (QE) program was introduced last September.

Yahoo edged higher after the Internet company said it will acquire blogger service Tumblr for about $1.1 billion in cash. The deal marks the largest acquisition of a social networking company in years, exceeding Facebook's $1 billion purchase of Instagram last year.

So far, 93 percent of S&P 500 companies have reported quarterly results, with 67 percent of firms topping earnings expectations and 24 percent missing forecasts, according to data from Reuters. If all remaining companies report earnings in line with estimates, earnings will be up 4.8 percent from last year's first quarter.

Precious metals were in focus earlier in the day, after spot silver prices dropped by as much as 9 percent in Asian trading and gold prices fell 2 percent.

"There has been chatter suggesting the outsized move was driven by a margin call and subsequent liquidation by an investor. Notably, gold is poised to close weaker for the tenth time in 11 sessions, and is now trading at similar levels as the April lows ($1345 per ounce)," said Deutsche Bank's Jim Reid in a research note on Monday.